The clean energy certificates market in India has hit a hurdle due to the lack of demand, as state distribution utilities failed to purchase the requisite 5% renewable energy.
Despite the industry witnessing high supply rates, the state utilities’ obligations were not honored, posing risks for investors in particular and the sector in general, reported The Economic Times.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
State utilities had earlier agreed to source a part of their electricity from renewable such as biofuels, biomass, solar, wind and small hydro sectors for supply to the grid.
As the number of solar and winds plants are yet to have an even foothold across the country, the utilities can purchase certificates from the Indian Energy Exchange (IEX) or the Power Exchange India.
Each renewable energy certificate represents 1,000 units of renewable power. However, prices of these certificates decline nearly 45% in the past few months.
One certificate amounted to INR1,500 ($27.19) in October, a decrease from a cost of INR2,700 ($49) in October 2011 with only 132,000 certificates were sold against the 851,000 certificates available on offer.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIEX senior business development Rajesh K Mediratta told the news agency, "If energy certificates are not sold, their incentive for generating power declines."
